EXHIBIT 4.7
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
BE SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT.
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Cygnus, Inc.
COMMON STOCK PURCHASE WARRANT
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This certifies that, for good and valuable consideration, Cygnus, Inc., a
Delaware corporation (the "Company"), grants to Petkevich & Partners, LLC
("P&P"), or its registered, permitted assigns (together with P&P, the
"Warrantholder"), the right to subscribe for and purchase from the Company a
total of 120,000 validly issued, fully paid and nonassessable shares (the
"Warrant Shares") of the Company's Common Stock, $0.001 par value (the
"Common Stock"). A total of 60,000 Warrant Shares (the "First Tranche") are
available at the purchase price per share of $.01 (the "First Tranche
Exercise Price"), exercisable at any time and from time to time during the
period (the "First Tranche Exercise Period") commencing on the Closing Date
and ending on March 1, 1999, all subject to the terms, conditions and
adjustments herein set forth. A total of 60,0000 additional Warrant Shares
(the "Second Tranche") are available at the purchase price per share of $3.25
(the "Second Tranche Exercise Price"), exercisable at any time and from time
to time during the period (the "Second Tranche Exercise Period") commencing
on the Closing Date and ending on October 31, 1999, all subject to the terms,
conditions and adjustments herein set forth.
1. DURATION AND EXERCISE OF WARRANT; LIMITATION ON EXERCISE;
PAYMENT OF TAXES.
1.1 DURATION AND EXERCISE OF WARRANT.
(a) CASH EXERCISE. This Warrant may be exercised by the Warrantholder by
(i) the surrender of this Warrant to the Company, with a duly executed
Exercise Form specifying the number of Warrant Shares to be purchased, during
normal business hours on any Business Day during the First Tranche Exercise
Period or the Second Tranche Exercise Period, as the case may be, and (ii)
the delivery of payment to the Company, for the account of the Company, by
cash, wire transfer of immediately available funds to a bank account
specified by the Company, or by certified or bank cashier's check, of the
First Tranche Exercise Price or the Second Tranche Exercise Price, as the
case may be, for the number of Warrant Shares specified in the Exercise Form
in lawful money of the United States of America. The Company agrees that such
Warrant Shares shall be deemed to be issued to the Warrantholder as the
record holder of such Warrant Shares as of the close of business on the date
on which this Warrant shall have been surrendered and payment made for the
Warrant Shares as aforesaid. A stock certificate or certificates for the
Warrant Shares specified in the Exercise Form shall be delivered to the
Warrantholder as promptly as practicable, and in any event within 10 days,
thereafter. The stock certificate or certificates so delivered shall be in
denominations of 100 shares each or such lesser or greater denominations as
may be reasonably specified by the Warrantholder in the Exercise Form. If
this Warrant shall have been exercised only in part, the Company shall, at
the time of delivery of the stock certificate or certificates, deliver to the
Warrantholder a new Warrant evidencing the rights to purchase the remaining
Warrant Shares, which new Warrant shall in all other respects be identical
with this Warrant. No adjustments shall be made on Warrant Shares issuable on
the exercise of this Warrant for any cash dividends paid or payable to
holders of record of Common Stock prior to the date as of which the
Warrantholder shall be deemed to be the record holder of such Warrant Shares.
(b) NET ISSUE EXERCISE. In lieu of exercising this Warrant pursuant to
Section 1.1(a), this Warrant may be exercised by the Warrantholder by the
surrender of this Warrant to the Company, with a duly executed Exercise Form
marked to reflect Net Issue Exercise and specifying the number of Warrant
Shares to be purchased from the First Tranche and/or the Second Tranche,
during normal business hours on any Business Day during either the First
Tranche Exercise Period or the Second Tranche Exercise Period, as the case
may be. The Company agrees that such Warrant Shares shall be deemed to be
issued to the Warrantholder as the record holder of such Warrant Shares as of
the close of business on the date on which this Warrant shall have been
surrendered as aforesaid. Upon such exercise, the Warrantholder shall be
entitled to receive shares equal to the value of the First Tranche and the
Second Tranche of this Warrant (or the portion thereof being canceled) by
surrender of this Warrant to the Company together with notice of such
election in which event the Company shall issue to Warrantholder a number of
shares of the Company's Common Stock computed as of the date of surrender of
this Warrant to the Company using the following formula:
X = Y x (A-B)
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A
Where X = the number of shares of Common Stock to be issued to
Warrantholder under this Section 1.1(b) from the First
Tranche or the Second Tranche, as applicable;
Y = the number of shares of Common Stock otherwise purchasable
under this Warrant (at the date of such calculation) from the
First Tranche or the Second Tranche, as applicable;
A = the fair market value of one share of the Company's Common
Stock (at the date of such calculation);
B = the First Tranche Exercise Price or the Second Tranche
Exercise Price, as applicable (as adjusted to the date of such
calculation).
(c) FAIR MARKET VALUE. For purposes of Section 1.1(b) fair market value
of one share of the Company's Common Stock shall mean:
(i) the closing price per share of the Company's Common Stock
on the principal national securities exchange on which the Common
Stock is listed or admitted to trading or,
(ii) if not listed or traded on any such exchange, the last
reported sales price per share on the Nasdaq National Market or the
Nasdaq Small-Cap Market (collectively, "Nasdaq") or,
(iii) if not listed or traded on any such exchange or Nasdaq,
the average of the bid and asked price per share as reported in the
"pink sheets" published by the National Quotation Bureau, Inc. (the
"pink sheets") or,
(iv) if such quotations are not available, the fair market
value per share of the Company's Common Stock on the date such notice
was received by the Company as determined by the Board of Directors of
the Company.
1.2 PAYMENT OF TAXES. The issuance of certificates for Warrant Shares
shall be made without charge to the Warrantholder for any stock transfer or
other issuance tax in respect thereto; PROVIDED, HOWEVER, that the
Warrantholder shall be required to pay any and all taxes which may be payable
in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than that of the then Warrantholder as reflected
upon the books of the Company.
2. RESTRICTIONS ON TRANSFER; RESTRICTIVE LEGENDS.
2.1 RESTRICTIONS ON TRANSFER; COMPLIANCE WITH SECURITIES LAWS. This
Warrant and the Warrant Shares issued upon the exercise of the Warrant may
not be transferred or assigned in whole or in part without compliance with
all applicable federal and state securities laws by the transferor and
transferee (including the delivery of investment representation letters and
legal opinions reasonably satisfactory to the Company, if such are requested
by the Company). The Warrantholder, by acceptance hereof, acknowledges that
this Warrant and the Warrant Shares to be issued upon exercise hereof are
being acquired solely for the Warrantholder's own account and not as a
nominee for any other party, and for investment, and that the Warrantholder
will not offer, sell or otherwise dispose of this Warrant or any Warrant
Shares to be issued upon exercise hereof except under circumstances that will
not result in a violation of the Securities Act or any state securities laws.
Upon exercise of this Warrant, the Warrantholder shall, if requested by the
Company, confirm in writing, in a form satisfactory to the Company, that the
Warrant Shares so purchased are being acquired solely for the Warrantholder's
own account and not as a nominee for any other party, for investment, and not
with a view toward distribution or resale.
2.2 RESTRICTIVE LEGENDS. Except as otherwise permitted by this Section
2, each Warrant shall (and each Warrant issued upon direct or indirect
transfer or in substitution for any Warrant issued pursuant to Section 4
shall) be stamped or otherwise imprinted with a legend in substantially the
following form:
"THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER
SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH
ACT."
Except as otherwise permitted by this Section 2, each stock certificate for
Warrant Shares issued upon the exercise of any Warrant and each stock
certificate issued upon the direct or indirect transfer of any such Warrant
Shares shall be stamped or otherwise imprinted with a legend in substantially
the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
BE SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT."
Notwithstanding the foregoing, the Warrantholder may require the Company to
issue a Warrant or a stock certificate for Warrant Shares, in each case
without a legend, if (i) such Warrant or such Warrant Shares, as the case may
be, have been registered for resale under the Securities Act or sold pursuant
to Rule 144 under the Securities Act (or a successor rule thereto) or (ii)
the Warrantholder has received an opinion of counsel reasonably satisfactory
to the Company that such registration is not required with respect to such
Warrant or such Warrant Shares, as the case may be.
3. RESERVATION AND REGISTRATION OF SHARES, ETC.
The Company covenants and agrees that all Warrant Shares which are issued
upon the exercise of this Warrant will, upon issuance, be validly issued,
fully paid and nonassessable and free from all taxes, liens, security
interests, charges and other encumbrances with respect to the issue thereof,
other than taxes in respect of any transfer occurring contemporaneously with
such issue. The Company further covenants and agrees that, during the First
Tranche Exercise Period and the Second Tranche Exercise Period, as the case
may be, the Company will at all times have authorized and reserved, and keep
available free from preemptive rights, a sufficient number of shares of
Common Stock to provide for the exercise of the rights represented by this
Warrant and will, at its expense, upon each such reservation of shares,
procure such listing of such shares of Common Stock (subject to issuance or
notice of issuance) as then may be required on all stock exchanges on which
the Common Stock is then listed or on Nasdaq.
4. EXCHANGE, LOSS OR DESTRUCTION OF WARRANT.
Subject to the terms and conditions hereof, including the restrictions on
transfer in Section 2, upon surrender of this Warrant to the Company with a
duly executed Assignment Form and funds sufficient to pay any transfer tax,
the Company shall, without charge, execute and deliver a new Warrant or
Warrants of like tenor in the name of the assignee named in such Assignment
Form and this Warrant shall promptly be canceled. Upon receipt by the Company
of evidence satisfactory to it of the loss, theft, destruction or mutilation
of this Warrant and, in the case of loss, theft or destruction, of such bond
or indemnification as the Company may require, and, in the case of such
mutilation, upon surrender and cancellation of this Warrant, the Company will
execute and deliver a new Warrant of like tenor. The term "Warrant" as used
in this Agreement shall be deemed to include any Warrants issued in
substitution or exchange for this Warrant.
5. OWNERSHIP OF WARRANT.
The Company may deem and treat the person in whose name this Warrant is
registered as the holder and owner hereof (notwithstanding any notations of
ownership or writing hereon made by anyone other than the Company) for all
purposes and shall not be affected by any notice to the contrary, until
presentation of this Warrant for registration of transfer as provided in
Section 4.
6. CERTAIN ADJUSTMENTS.
6.1 The number of Warrant Shares purchasable upon the exercise of this
Warrant and the First Tranche Exercise Price and the Second Tranche Exercise
Price shall be subject to adjustment as follows:
(a) STOCK DIVIDENDS. If at any time prior to the exercise of this
Warrant in full (i) the Company shall fix a record date for the issuance of
any stock dividend payable in shares of Common Stock or (ii) the number of
shares of Common Stock shall have been increased by a subdivision or split-up
of shares of Common Stock, then, on the record date fixed for the
determination of holders of Common Stock entitled to receive such dividend or
immediately after the effective date of subdivision or split-up, as the case
may be, the number of shares of Common Stock to be delivered upon exercise of
this Warrant will increased so that the Warrantholder will be entitled to
receive the number of shares of Common Stock that such Warrantholder would
have owned immediately following such action had this Warrant been exercised
immediately prior thereto, and the Exercise Price will be adjusted as
provided below in paragraph (f).
(b) COMBINATION OF STOCK. If at any time prior to the exercise of this
Warrant in full the number of shares of Common Stock outstanding shall have
been decreased by a combination of the outstanding shares of Common Stock,
then, immediately after the effective date of such combination, the number of
shares of Common Stock to be delivered upon exercise of this Warrant will be
decreased so that the Warrantholder thereafter will be entitled to receive
the number of shares of Common Stock that such Warrantholder would have owned
immediately following such action had this Warrant been exercised immediately
prior thereto, and the Exercise Price will be adjusted as provided below in
paragraph (f).
(c) REORGANIZATION, ETC. If at any time prior to the exercise of this
Warrant in full any capital reorganization of the Company, or any
reclassification of the Common Stock, or any consolidation of the Company
with or merger of the Company with or into any other person or any sale,
lease or other transfer of all or substantially all of the assets of the
Company to any other person, shall be effected in such a way that the holders
of Common Stock shall be entitled to receive stock, other securities or
assets (whether such stock, other securities or assets are issued or
distributed by the Company or another person) with respect to or in exchange
for Common Stock, then, upon exercise of this Warrant the Warrantholder shall
have the right to receive the kind and amount of stock, other securities or
assets receivable upon such reorganization, reclassification, consolidation,
merger or sale, lease or other transfer by a holder of the number of shares
of Common Stock that such Warrantholder would have been entitled to receive
upon exercise of this Warrant had this Warrant been exercised immediately
before such reorganization, reclassification, consolidation, merger or sale,
lease or other transfer, subject to adjustments that shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Section 6.
(d) FRACTIONAL SHARES. No fractional shares of Common Stock or scrip
shall be issued to any Warrantholder in
connection with the exercise of this Warrant. Instead of any fractional
shares of Common Stock that would otherwise be issuable to such
Warrantholder, the Company will pay to such Warrantholder a cash adjustment
in respect of such fractional interest in an amount equal to that fractional
interest of the then current closing price per share of Common Stock.
(e) CARRYOVER. Notwithstanding any other provision of this Section 6, no
adjustment shall be made to the number of shares of Common Stock to be
delivered to the Warrantholder (or to the First Tranche Exercise Price or the
Second Tranche Exercise Price, as the case may be) if such adjustment
represents less than 1% of the number of shares to be so delivered, but any
lesser adjustment shall be carried forward and shall be made at the time and
together with the next subsequent adjustment which together with any
adjustments so carried forward shall amount to 1% or more of the number of
shares to be so delivered.
(f) EXERCISE PRICE ADJUSTMENT. Whenever the number of Warrant Shares
purchasable upon the exercise of the Warrant is adjusted, as herein provided,
the First Tranche Exercise Price and the Second Tranche Exercise Price
payable upon the exercise of this Warrant shall be adjusted by multiplying
such First Tranche Exercise Price and Second Tranche Exercise Price, as
applicable, immediately prior to such adjustment by a fraction, of which the
numerator shall be the number of Warrant Shares purchasable upon the exercise
of the First Tranche and Second Tranche, respectively, of this Warrant
immediately prior to such adjustment, and of which the denominator shall be
the number of Warrant Shares purchasable upon exercise of the First Tranche
and Second Tranche, respectively, of this Warrant immediately thereafter.
(g) NO DUPLICATE ADJUSTMENTS. Notwithstanding anything else to the
contrary contained herein, in no event will an adjustment be made under the
provisions of this Section 6 to the number of Warrant Shares issuable upon
exercise of this Warrant or the Exercise Price for any event if an adjustment
having substantially the same effect to the Warrantholder as any adjustment
that otherwise would be made under the provisions of this Section 6 is made
by the Company for any such event to the number of shares of Common Stock (or
other securities) issuable upon exercise of this Warrant.
6.2 NO ADJUSTMENT FOR DIVIDENDS. Except as provided in Section 6.1, no
adjustment in respect of any dividends shall be made during the term of the
Warrant or upon the exercise of this Warrant.
6.3 NOTICE OF ADJUSTMENT. Whenever the number of Warrant Shares or the
Exercise Price of such Warrant Shares is adjusted, as herein provided, the
Company shall promptly mail by first class, postage prepaid, to the
Warrantholder, notice of such adjustment or adjustments and a certificate of
the chief financial officer of the Company setting forth the number of
Warrant Shares and the Exercise Price of such Warrant Shares after such
adjustment for the First Tranche and Second Tranche of this Warrant, setting
forth a brief statement of the facts requiring such adjustment and setting
forth the computation by which such adjustment was made.
7. NOTICES OF CORPORATE ACTION.
In the event of
(a) any taking by the Company of a record of the holders of any class of
securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class
or any other securities or property, or to receive any other right, or
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any consolidation or
merger involving the Company and any other party, or
(c) any voluntary or involuntary dissolution, liquidation or winding-up
of the Company,
the Company will mail to the Warrantholder a notice specifying (i) the date
or expected date on which any such record is to be taken for the purpose of
such dividend, distribution or right and the amount and character of any such
dividend, distribution or right, and (ii) the date or expected date on which
any such reorganization, reclassification, recapitalization, consolidation,
merger, dissolution, liquidation or winding-up is to take place and the time,
if any such time is to be fixed, as of which the holders of record of Common
Stock (or other securities) shall be entitled to exchange their shares of
Common Stock (or other securities) for the securities or other property
deliverable upon such reorganization, reclassification, recapitalization,
consolidation, merger, dissolution, liquidation or winding-up. Such notice
shall be mailed at least 10 days prior to the date therein specified, in the
case of any date referred to in the foregoing subdivision (i), and at least
10 days prior to the date therein specified, in the case of the date referred
to in the foregoing subdivision (ii).
8. DEFINITIONS.
As used herein, unless the context otherwise requires, the following terms
have the following respective meanings:
ASSIGNMENT FORM: an Assignment Form in the form annexed hereto as Exhibit B.
BUSINESS DAY: any day other than a Saturday, Sunday or a day on which
national banks are authorized by law to close in the City of New York, State
of New York.
COMPANY: Cygnus, Inc., a Delaware corporation.
EXCHANGE ACT: the Securities Exchange Act of 1934, as amended, or any
successor federal statute, and the rules and regulations of the SEC
thereunder, all as the same shall be in effect at the time. Reference to a
particular section of the Securities Exchange Act of 1934, as amended, shall
include a reference to a comparable section, if any, of any successor federal
statute.
EXERCISE FORM: an Exercise Form in the form annexed hereto as Exhibit A.
FIRST TRANCHE: the meaning specified on the cover of this Warrant.
SECOND TRANCHE: the meaning specified on the cover of this Warrant.
FIRST TRANCHE EXERCISE PERIOD: the meaning specified on the cover of this
Warrant.
SECOND TRANCHE EXERCISE PERIOD: the meaning specified on the cover of this
Warrant.
FIRST TRANCHE EXERCISE PRICE: the meaning specified on the cover of this
Warrant, as such price may be adjusted pursuant to Section 6 hereof.
SECOND TRANCHE EXERCISE PRICE: the meaning specified on the cover of this
Warrant, as such period may be adjusted pursuant to Section 6 hereof.
NASDAQ: the meaning specified in Section 1.1(c)(ii).
SEC: the Securities and Exchange Commission or any other federal agency at
the time administering the Securities Act or the Exchange Act, whichever is
the relevant statute for the particular purpose.
SECURITIES ACT: the Securities Act of 1933, as amended, or any successor
federal statute, and the rules and regulations of the Commission thereunder,
all as the same shall be in effect at the time. Reference to a particular
section of the Securities Act of 1933, as amended, shall include a reference
to the comparable section, if any, of any successor federal statute.
WARRANTHOLDER: the meaning specified on the cover of this Warrant.
WARRANT SHARES: the meaning specified on the cover of this Warrant, subject
to the provisions of Section 6.
9. MISCELLANEOUS.
9.1 ENTIRE AGREEMENT. This Warrant constitutes the entire agreement
between the Company and the Warrantholder with respect to this Warrant.
9.2 BINDING EFFECTS; BENEFITS. This Warrant shall inure to the benefit
of and shall be binding upon the Company and the Warrantholder and their
respective heirs, legal representatives, successors and permitted assigns.
Nothing in
this Warrant, expressed or implied, is intended to or shall confer on any
person other than the Company and the Warrantholder, or their respective
heirs, legal representatives, successors or permitted assigns, any rights,
remedies, obligations or liabilities under or by reason of this Warrant.
9.3 AMENDMENTS AND WAIVERS. This Warrant may not be modified or amended
except by an instrument or instruments in writing signed by the Company and
the Warrantholder. Either the Company or the Warrantholder may, by an
instrument in writing, waive compliance by the other party with any term or
provision of this Warrant on the part of such other party hereto to be
performed or complied with. The waiver by any such party of a breach of any
term or provision of this Warrant shall not be construed as a waiver of any
subsequent breach.
9.4 SECTION AND OTHER HEADINGS. The section and other headings contained
in this Warrant are for reference purposes only and shall not be deemed to be
a part of this Warrant or to affect the meaning or interpretation of this
Warrant.
9.5 FURTHER ASSURANCES. Each of the Company and the Warrantholder shall
do and perform all such further acts and things and execute and deliver all
such other certificates, instruments and documents as the Company or the
Warrantholder may, at any time and from time to time, reasonably request in
connection with the performance of any of the provisions of this Agreement.
9.6 NOTICES. All notices and other communications required or permitted
to be given under this Warrant shall be in writing and shall be deemed to
have been duly given if delivered personally or sent by United States mail,
postage prepaid, to the parties hereto at the following addresses or to such
other address as any party hereto shall hereafter specify by notice to the
other party hereto:
(a) if to the Company, addressed to:
Cygnus, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: President
Telecopier: (000) 000-0000
with a copy to:
Pillsbury Madison & Sutro
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxx X. Xxxxx, Esq.
(b) if to the Warrantholder, addressed to the address of such
Warrantholder appearing on the books of the Company.
Except as otherwise provided herein, all such notices and communications
shall be deemed to have been received on the date of delivery thereof, if
delivered personally, or on the third Business Day after the mailing thereof.
9.7 SEPARABILITY. Any term or provision of this Warrant which is invalid
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the terms and provisions of this Warrant
or affecting the validity or enforceability of any of the terms or provisions
of this Warrant in any other jurisdiction.
9.8 GOVERNING LAW. This Warrant shall be deemed to be a contract made
under the laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such State
applicable to agreements made and to be performed entirely within such State.
9.9 NO RIGHTS OR LIABILITIES AS STOCKHOLDER. Nothing contained in this
Warrant shall be determined as conferring upon the Warrantholder any rights
as a stockholder of the Company or as imposing any liabilities on the
Warrantholder to purchase any securities whether such liabilities are
asserted by the Company or by creditors or stockholders of the Company or
otherwise.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
duly authorized officer.
Dated: February 23, 1999.
CYGNUS, INC.
By: /s/ XXXX X XXXXXXX
Title: CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
